The negative environment for US truckers continues on, with weak expectations for Q1 quarterly earnings reports and other measures of market conditions.
Supply Chain Digest Says...
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| Since mid-2020, close to 325,000 carriers have entered the trucking sector, while about 231,000 carriers have left, according to transportation research firm FTR Transportation Intelligence. |
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Let’s start with the latter, where last week we had the monthly freight numbers for March from Cass Information Systems, based on the billions of dollars of freight bills Cass pays for its shipper clients.
The shipments component of the Cass Freight Index fell a modest 0.2% in March versus February. When seasonally adjusted, shipment volumes declined 2.3% month-over-month.
Shipments fell 3.6% versus March of 2023, though that decline was the smallest year-over-year drop in in a year.
The Cass Linehaul Index, which measures per mile US truckload rates before fuel surcharges and other accessorial fees, was up 0.2% in March versus February, but down 4.7% versus March of 2023. However, Cass notes the level of year-over-year declines in rates continues to ease.
As usual, Cass offers a summary chart of key metrics for the US trucking sector for March, as can be seen below.
Meanwhile, the Wall Street Journal wrote this week that “Freight rates have been retreating for much of the year in the trucking sector’s spot market. Analysts and industry executives say longer-term contract prices are also declining as shipping customers focus on keeping inventories lean and logistics spending tight.”
For example, load board operator DAT Solutions says spot market truckload rates have fallen 6.5% since the start of 2024.
The Journal quotes Paul Svindland, CEO of STG Logistics, a privately held logistics provider based in Bensenville, Ill., as saying STG is dropping contract rates by “low single digits” this bid season in order to maintain the freight business it had in 2023.
“The floor keeps getting lower,” Svindland told the Journal.
Source: Cass Information Systems
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In a research note earlier this month, the transportation analysts at JP Morgan observed US truckers “face lingering excess capacity in the market, and the recent signs of net capacity gains only add insult to injury,” adding that rates need to fall further to push more capacity out and “restore balance in the truckload market.”
Since mid-2020, close to 325,000 carriers have entered the trucking sector, while about 231,000 carriers have left, according to transportation research firm FTR Transportation Intelligence.
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